In Demand says it will match baseball offer

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NEW YORK -- Major League Baseball has called the cable industry out on strikes, saying an offer Wednesday to carry the Extra Innings premium package of out-of-market games falls short of terms MLB set two weeks ago.

MLB and DirecTV announced a multiyear agreement March 8 for the Extra Innings subscription package that also guarantees basic-tier carriage of the Baseball Channel when it launches in 2009. EchoStar and In Demand were told they had until March 31 to decide whether they wanted to match that deal to be allowed to continue to offer the games to their subscribers.

On Wednesday, In Demand -- the VOD proxy for cable companies Comcast Corp., Time Warner Cable and Cox Communications -- said it would accept the offer "at consistent rates and carriage requirements, which the league had agreed to with DirecTV." In Demand also said it wanted a "most favored nation" provision to determine comparability.

However, MLB president and COO Bob DuPuy said that In Demand whiffed.

"In spite of their public comments, the response falls short of nearly all of the material conditions, among them requirements for carriage of the Baseball Channel and their share of the rights fees for Extra Innings," DuPuy said.

Carriage of the Baseball Channel would equal the distribution "to at least the number of subscribers to which DirecTV launches the channel," In Demand said. DirecTV committed to launching the channel on 15 million households in 2009.

In a filing with the FCC's Media Bureau on Wednesday, MLB provided more detail about its agreement with DirecTV and what In Demand and EchoStar would have to do to match the terms of that deal. MLB has been under inquiry about the deal and will meet with FCC and lawmakers next week to answer questions.

MLB in its filing said DirecTV has agreed to offer the MLB Channel to 80% of its subscriber base and that EchoStar would have to do the same. In Demand MSOs would only need to commit to a package that includes 80% of its digital subscribers, which works out to 40% of its residential subscribers.

Late Wednesday, In Demand said its response was fully responsive to MLB's offer.

"By rejecting this matching offer, MLB has proved it never intended for In Demand to have a fair and equal opportunity to bid for Extra Innings," the company said in a statement. "We, like many, many others, question MLB's commitment to its fans by limiting distribution of both Extra Innings and the Baseball Channel."

EchoStar wasn't available for comment.

It now appears that the Extra Innings package will be a DirecTV exclusive. DirecTV's Chase Carey said the satellite company had no problem with carrying Extra Innings even if it weren't exclusive, though that would affect some of the enhancements being designed. It also goes without saying that DirecTV would pay MLB less without exclusivity.

Before Wednesday's announcement, MLB's top TV negotiator talked tough at a Manhattan gathering of sports executives.

"What you have here is a big load of sour grapes ... from bidders who participated in a full, fair, equitable and arms-length negotiation, and they lost. They failed to step up to the plate," MLB executive vp Tim Brosnan said during a panel discussion at the World Congress of Sports.

Brosnan said the negotiations were fair and that EchoStar and In Demand were given one more chance to meet the DirecTV offer and stay in the game. But Brosnan said DirecTV's offer of enhancements -- similar to those for NFL Sunday Ticket and NASCAR Hotpass, also exclusive deals for DirecTV -- gave the satellite broadcaster a leg up.

"The avid (fans) demand more than just replays of games," Brosnan said.